Southwest ring road construction up in the air thanks to falling oil prices

Community leaders worry any further delays might put the $5-billion project in jeopardy after the most recent deal has bound the province to complete work in seven years, or return the lands back to the Tsuu T'ina Nation.

After decades of failed negotiations, rejected deals and political infighting, final construction of the southwest ring road may be facing yet another hurdle as the province deals with plummeting oil prices and dwindling energy revenues.

Community leaders worry any further delays might put the $5-billion project in jeopardy after the most recent deal has bound the province to complete work in seven years, or return the lands back to the Tsuu T’ina Nation.

And critics say capital projects should continue, especially during tough economic times when jobs are needed and costs for labour and materials are low.

According to Premier Jim Prentice, all future capital projects are being reviewed, including the southwest ring road, with no confirmation the timeline will remain the same as the government heads into this spring’s budget machinations.

“These are very challenging times and very difficult times for our province,” Prentice told the Herald on Wednesday from a Toronto teleconference.

“The timelines for expenditures need to be considered along with other projects that are under discussion in our five-year capital plan, even our 10-year capital plan. And it (southwest ring road) is one of the projects on the list that we’re reviewing.”

But Rachel Notley, leader of Alberta’s New Democrats, argued that while putting off promised capital work isn’t new for the provincial Tories, this particular economic slowdown is a good time to continue projects.

“If you do move ahead with infrastructure when the economy slows, you can do it less expensively,” she said.

“You may take on debt in the short term but you will be able to construct at a time when costs are low.

“Projects should be continued, not abandoned.”

The southwest ring road was set to begin construction in 2016 after the province was finally able to reach a long-awaited agreement after decades of negotiations with the Tsuu T’ina Nation.

The deal, put together in October 2013, gives Tsuu T’ina $275 million, and another $65 million to move homes, businesses and infrastructure, and to cover other expenses. It also gives the band about 2,150 hectares of property, which is currently Crown land.

In return, the province gets about 425 hectares on the city’s edge to build the southwest ring road; it guarantees new nation property will become reserve land, and it must build interchanges to the freeway. Alberta also has an obligation to have the road complete and open for traffic within seven years of the land transfer, otherwise the land reverts back to the nation.

Residents in the neighbouring Lakeview community say that after more than four decades of debating a plan, it’s critical that work begin as soon as possible.

“If they don’t get this done soon, it will never get done,” said Lindal Heppner, who has lived in Lakeview for more than 45 years.

Community president Allie Tulick agreed the project must be complete within a certain time frame, but added that it’s possible the clock is getting “reset,” because the land transfer is not yet complete.

“It’s tough on everyone right now. Vacations are getting cancelled, buying a new car is getting cancelled, a lot of stuff is getting cancelled.”

But in the meantime, Heppner added, traffic snarls continue to be a regular headache in the southwest, particularly along Glenmore Trail and Crowchild Trail while suburban development continues, adding traffic volume to existing roads.

“There’s so much cut-through traffic in our community right now. Sometimes it takes me a half an hour just to get out.”

Last spring, Alberta Transportation had expected to start construction on the southwest road by 2016 with a goal of opening the major route by 2020. At the time, project leaders said the massive undertaking — including 31 kilometres of roadway, 20 new interchanges and 66 bridge crossings — would have significant challenges, such as building through the environmentally sensitive Paskapoo Slopes and Weaselhead areas.

Plummeting oil prices are expected to put many major capital projects under the microscope this spring as the province faces less revenue heading into the budget, expected to come out in early March.

Last month, Alberta’s health minister warned his department is reassessing all capital projects — including Calgary’s long-anticipated new cancer centre — in light of falling oil prices. It means the opening date for the $1.3-billion facility, which has yet to be constructed, could be delayed past 2020.

“We are sympathetic to the economic pressures government is feeling right now,” said Myka Osinchuk, CEO of the Alberta Cancer Foundation. “But I would hope the priority of these kinds of projects remains high as soon as the situation resolves.

“This is a very-much needed project. Cancer doesn’t care what the price of oil is.”

But Scott Hennig, spokesman for the Canadian Taxpayers Federation in Alberta, said the province should have halted infrastructure spending years ago.

“We just keep increasing infrastructure spending and that’s hard to sustain. Once you build the roads or the hospitals, you have to have the money to maintain it, or fill it.”

For the southwest ring road, Hennig added, the province needs to re-examine its timeline and continue building but stretch it over a longer time, delaying completion “as long as their contract allows.”

City councillor Richard Pootmans, who represents southwest areas directly affected by the road, says the road needs to be built as soon as possible.

“I’d be much happier if we had a method of paying for the ring road right now, going into a time when it might be less expensive to construct it the timing might be good — it’s how it gets financed.”

Pootmans added that congestion looms as the top issue in the public’s mind, with surveys showing traffic tie-ups impact productivity, quality of life and health.

“It’s something we really, really should be looking at. By the same token, we have to be intelligent about the new economic reality,” he said.

“There are funding mechanisms, perhaps more expensive, essentially debt, to pay for that right now, and that’s a provincial government decision and I would respect the call they make. They’re looking at a very difficult financial environment.”

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